Infinity Pharmaceuticals, Inc.
Q4 2013 Earnings Call Transcript

Published: 25 Feb 2014

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals conference call to discuss the company’s financial results for the fourth quarter and year-end of 2013. My name is Stephanie and I’ll be your operator for today’s call. At this time, all participants are in a listen-only mode. There will be a question and answer session to follow. Please be advised that this call is being recorded at Infinity’s request. At this time, I would like to introduce your host for today’s call, Ms. Kate Murray, Senior Investor Relations Associate at Infinity. Please go ahead.

[Kate Murray:]

Thank you Stephanie and good morning everyone. Welcome to today’s call to discuss our recent business progress and review our fourth quarter and year-end 2013 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer; Julian Adams, President of Research and Development, and Larry Bloch, Executive Vice President, Chief Financial Officer and Chief Business Officer. Following our remarks, we will open up the call for Q&A. The press release issued earlier today details our results and is available on our website at www.infi.com. Please note that during this call, we may make forward-looking statements about our future expectations and plans, including clinical development milestones, the therapeutic potential of our product candidates, and financial projections. It is possible that our actual results may differ materially from what we project today due to the considerations described in the Risk Factors section of our 2013 annual report on Form 10-K that we filed this morning. While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then-current view. We may update these statements in the future but are not taking on an obligation to do so. Now I’d like to turn the call over to Adelene.

[Adelene Perkins:]

Good morning everyone and thanks for joining us on today’s year-end 2013 call. Let me start with perspectives on our lead program, IPI-145. In 2013, we developed key data demonstrating that IPI-145 is highly active across a broad range of hemalignancies and is generally well tolerated. On the basis of this clinical profile, we have two potential registration studies underway

[Julian Adams:]

Thanks. As Adelene mentioned, in the course of our Phase I clinical development of IPI-145, we have generated data demonstrating activity with 145 across a broad range of hematologic malignancies. In particular, for relapse refractory INHL, we’ve seen a 73% response rate, the highest monotherapy response rate that has ever been observed in these patient populations with any targeted drug. In addition, IPI-145 had a 20% complete response rate in this group of patients. In chronic lymphocytic leukemia, or CLL, we have observed a notable response rate of 89% and a 48% overall response rate as defined by the International Working Group Criteria, or IWCLL criteria, including one complete response. Beyond INHL and CLL, we have observed activity in additional patient populations, including those with T-cell malignancies. With peripheral T-cell lymphoma, or PTCL, we have observed a response rate of 55%. We have also seen activity in patients with advanced aggressive non-Hodgkins lymphoma, including diffuse large B-cell lymphoma, or DLBCL. In preclinical studies, we have observed synergistic activity in combination with ibrutinib, a Bruton tyrosine kinase, or BTK, inhibitor. With regards to safety, adverse events have been predominantly low grade or asymptomatic and are manageable, and are consistent with the co-morbidities associated with these diseases. We’ve also learned through our own experience and the experience of others developing B-cell receptor inhibitors how to manage these events so that we can keep patients on drug for an extended period of time to ensure that they may receive the full benefit of treatment. On the basis of the strong activity and tolerability we’ve seen to date, we’re now in potential registration studies in two distinct hemolytic indications

[Lawrence Bloch:]

Thanks Julian. As Adelene mentioned earlier, we’re in a strong financial position to execute on our strategic development plan with approximately $215 million at the beginning of 2014 and the $100 million debt facility we announced today which provides important flexibility as it allows us to access these funds over the next 12 months without any obligation to do so. Deerfield is a top shareholder, knows our programs and team well, and has been a long-time supporter of Infinity. Turning to our financial results briefly, as of December 31, 2013, we had total cash, cash equivalents and available for sale securities of $214.5 million compared to $326.6 million at the end of 2012 and $250.9 million at the end of the third quarter of last year. R&D expense for the full year 2013 was $99.8 million compared to $118.6 million for 2012. The decrease in R&D expense in 2013 compared to 2012 was primarily due to the conclusion of our Hsp90 and Hedgehog pathway programs along with decreased milestone payments to Millennium Takeda for IPI-145 and IPI-443, partially offset by higher clinical development expenses for IPI-145. G&A expense was approximately $27.9 million for both the full year 2013 and 2012. Net loss for the full year 2013 was $126.8 million or a basic and diluted loss per common share of $2.64 compared to $54 million or basic and diluted loss per common share of $1.70 for 2012. In January, we provided financial guidance for 2014 which remains unchanged, with the exception of an extension of our cash runway. We expect operating expenses for 2014 to range from $170 million to $180 million. We expect that loss for 2014 to also range from $170 million to $180 million, and we expect that our current cash investments together with the $100 million availability under our debt facility will provide a cash runway into the second half of 2015. With that, we’ll open the call for Q&A.

[Operator:]

Thank you. [Operator instructions] Our first question comes from Cory Kasimov with JP Morgan. Your line is open.

[Whitney Ijem:]

Hi guys, this is Whitney on for Cory this morning. First question – on the additional clinical trial for 145 in hemalignancies, should we be thinking about that as sort of a part of the iNHL (indiscernible) development program, or not part of that, say T-cell or something else?

[Julian Adams:]

No, I think you’ve got it right. It should be considered as part of the iNHL program.

[Whitney Ijem:]

Okay, and then in terms of the asthma data and the additional cohort that you’re enrolling, have you given any data in terms of what that additional cohort is, whether it’s a different dose or different patients, or something to that effect?

[Julian Adams:]

No, we haven’t guided to what that cohort will be. We’re waiting to complete the trial to give the top line data.

[Whitney Ijem:]

In second half?

[Julian Adams:]

In the second half, that’s correct.

[Whitney Ijem:]

Great, okay. Thanks for taking the questions.

[Operator:]

Our next question comes from Joel Sendek with Stifel. Your line is open.

[Joel Sendek:]

Hi, thanks. Just a couple questions about Duo. I’m wondering if you could give us some—I know it’s early, but some idea how enrolment has been so far, and if you don’t mind, if you can give me what your expectation is for the control arm, the alpha arm as far as PFS?

[Julian Adams:]

Yeah, thank you for the question. So we are enrolling Duo. It has begun and it’s enrolling. We have anticipated that Duo will be a challenge to enroll in the United States because we’ve anticipated the approval of ibrutinib, and that has of course occurred. Nevertheless, we are engaged with key academic sites that are very committed to this trial because they’re doing a lot of qualitative science in these patient populations. The majority of the trial we expect will be enrolled in western Europe as well as Poland and Hungary. We’ve taken this into account when designing the trial and accounting for the randomization to ofatumumab.

[Joel Sendek:]

And your expectation for the control arm PFS?

[Julian Adams:]

You can look up the expected PFS for ofatumumab, but we’re not guiding on the statistical assumptions in the trial.

[Joel Sendek:]

Okay, thanks.

[Operator:]

The next question comes from Jason Kantor with Credit Suisse. Your line is open.

[Jason Kantor:]

Thanks. I guess a clinical question and a financial question. On the inflammation side, is it your intention that if positive, to move forward with IPI-145 in inflammation, or did I understand you correctly that you’re looking to position your other compound potentially in inflamm, just to separate the two in terms of dosing and pricing and such?

[Adelene Perkins:]

Thanks, Jason. It’s an important question. One of the reasons that we have both IPI-145 and 443 is so that it gives us the flexibility to figure out the optimal positioning of both of these molecules in oncology and inflammation, and so it will depend in large part on what dose we choose to go forward with in inflammation. We’ve declared our dose in oncology is 25 milligrams twice daily. We need to look at what dose makes sense in inflammation and make sure that those are compatible from an ultimate commercial positioning, and if they are compatible we could take 145 together in both, and if we believe that the portfolio will be optimized by directing 145 to hem and 443 to inflammation, we have that flexibility.

[Jason Kantor:]

Okay, and then in terms of the new debt facility, did you in fact draw on that upon signing it? I know you can draw in $25 million increments. Is that all available or did you draw some already?

[Lawrence Bloch:]

Thanks Jason, appreciate your question. No, we have not drawn any on the facility, so we still have the full $100 million real option to pull down at our discretion.

[Jason Kantor:]

Okay. What would likely trigger you doing that or not doing that?

[Lawrence Bloch:]

So the real optionality is the value, so the two major things that we’re focused on currently is execution on our current and additional trials to prosecute IPI-145 towards registration, and then we also want to be in a strong financial position as we enter into potential strategic collaboration discussions.

[Jason Kantor:]

And would you announce it or would you just wait for the quarter to disclose it if you do draw on it?

[Lawrence Bloch:]

I think we’d probably just wait for the quarter. We don’t think it’s a fundamental change in our financial position.

[Jason Kantor:]

All right, thank you.

[Adelene Perkins:]

Thanks Jason.

[Operator:]

Our next question comes from Matthew Andrews with Wells Fargo. Your line is open.

[Matthew Andrews:]

Yeah, good morning. Thanks for taking the questions. Two for me. First of all, can you provide us a status update on the Phase I/II combination study with Dr. Flynn, and did any of these data help inform on your Phase III Dynamo R combination study you’ll start this year? And then second of all, how much more efficacy and safety data do you need to see from the Phase I/II PTCL CTL CTCL study before you make a decision on investing in a pivotal program there? Thank you.

[Julian Adams:]

So for the first question, the study with Dr. Flynn as an investigator sponsored study, so we are not the sponsors of that study and therefore the status of that trial is left to the investigator as to when he will report data. We’ve enrolled a substantial number of patients, though, to enable the combination with rituxan and rituxan bendamustine, so it was a very important study for us to enable Dynamo +R, and with the safety that has been shared with us, we feel confident in the Dynamo +R trial design. The second question relates to our future plans in T-cell lymphoma. We’re still aggregating data there, still patients on study, and we’re still discussing internally and with key opinion leaders about what the next steps should be, and when we come to such a decision, we will let you know, of course.

[Matthew Andrews:]

Okay, thank you.

[Operator:]

Our next question comes from Ian Somaiya with Nomura. Your line is open.

[Do Kim:]

Hi, this is Do Kim in for Ian. I was hoping that you could maybe provide some more details on the backup compound, 443, maybe on how close you are to bringing it to clinic; and relative to 145, how does it compare in inhibiting the delta and gamma isomers?

[Julian Adams:]

Thank you for your question. IPI-443 is very similar to IPI-145 – I mean, chemically distinct. It’s got separate intellectual property, but I mean it’s similar in terms of it is also a delta-gamma inhibitor. It has very similar potency for the delta isoform and it is about threefold more potent for gamma. Other than that, we have completed some of the preclinical—well, we’ve completed preclinical studies to enable Phase I investigation, and so are very pleased with the general performance of IPI-443. It provides us the option to move that molecule into inflammation should we decide to do so once we’ve analyzed all the data from our inflammation studies.

[Do Kim:]

And as a follow-up, since 443 is three times more potent on gamma, do you think gamma could be more important in autoimmune indications?

[Julian Adams:]

Yes, I think there’s some very interesting literature data and our own in-house data that suggests an enhanced role for gamma in certain autoimmune conditions.

[Do Kim:]

Great, thank you.

[Operator:]

Again ladies and gentlemen, to ask a question, please press star then one on your touchtone telephone. Our next question comes from Navdeep Singh with Goldman Sachs. Your line is open.

[Lisa Zhang:]

Hi, this is Lisa in for Navdeep. Thanks for taking the question. If you apply the same response criteria the FDA applied on Imbruvica on its label, which was using different follow-up times, what would you calculate the response rate to be with IPI-145 in relapse refractory CLL?

[Julian Adams:]

We’re not in a position to recalculate our data. We don’t have the exact methodology that the FDA employed, and I don’t think given the numbers of patients that we have and the general heterogeneity of a Phase I population, I don’t think it is a meaningful comparison. We can compare our Phase I data to their Phase I data, which is a similar population, but I don’t think it’s instructive to do the comparisons the way you just described.

[Lisa Zhang:]

Okay, thanks. And then a follow-up – can you just walk us through the decision of entering into the $100 million debt facility versus a partnership? Are you still receiving interest from pharma companies on potential partnerships?

[Lawrence Bloch:]

Yes, so we’re certainly receiving and continue to receive interest from partnerships, potential partners. IPI-145 is a wholly owned Phase III asset with strong activity, as you’ve just described with Julian, that’s comparable in many indications to some drugs that have been approved or have obtained PDUFA dates, and so because there’s a very scarce number of drugs with that kind of profile and in terms of your question regarding the financing, it’s not an either/or, it’s an and. We really want to be in a strong position financially to execute on the ongoing clinical trial that Julian described as well as additional trials that we’ve committed through our guidance to start this year, and also to be in a strong position to select the best partnership to move forward with IPI-145 going forward.

[Lisa Zhang:]

Okay, thanks. Last question – for Duo, what was your rationale for proceeding with monotherapy comparison? Any reason why you didn’t take the same approach as Gilead, which is evaluating idelalisib plus or minus rituxan? Thanks so much.

[Julian Adams:]

Yes, it’s a great question. First of all, we think that our activity is superior to the Gilead profile, and we think that the most efficient and fastest path to full approval was this randomized study comparing with the standard of care, ofatumumab. We discussed that with both the FDA and EMA, harmonized our trial design and endpoints, and we feel that this is the most efficient and quickest way towards an approval.

[Lisa Zhang:]

Thanks again. Congrats on the progress.

[Julian Adams:]

Thank you.

[Operator:]

Our final question comes from Katherine Xu with William Blair. Your line is open.

[John Sonnier:]

Hi, this is actually John in for Katherine. Just a couple of quick questions. First on the debt facility, my understanding is the $25 million increments can happen theoretically today and tomorrow – there is no set time frame like one a quarter or anything like that. Is that true?

[Lawrence Bloch:]

Exactly. The full discretion is with Infinity over the term of the loan draw down, which is across the next 12 months.

[John Sonnier:]

Okay, great. And then the next question is clinically related. In terms of the T-cell option, it seems very attractive. I know that there’s a little bit of confusion because all the data is not sorted out at this point, but is there a possibility given the delta-gamma relationship in the affinity for gamma, the potency related to gamma, that 443 may be a candidate in T-cell and maybe as you’re waiting this out, or how does this all shake out?

[Julian Adams:]

So I think if we are to proceed with further T-cell trials, it would be with IPI-145.

[John Sonnier:]

Okay, great.

[Julian Adams:]

We have confidence that we are substantially inhibiting the gamma isoform in those patients.

[John Sonnier:]

Great. Thanks for taking the call.

[Operator:]

There are no further questions. I will now turn the call back over to management for closing remarks.

[Adelene Perkins:]

Thank you all for joining us today, and we’ll look forward to updating you through the remainder of this year. Have a good day.

[Operator:]

Thank you ladies and gentlemen. That does conclude today’s conference. You may all disconnect and have a wonderful day.